Supreme Court declines to review conviction of disgraced attorney Michael Avenatti in Nike extortion case

Washington — The Supreme Court on Tuesday turned away a bid by disgraced California attorney Michael Avenatti to overturn his conviction for attempting to extort nearly $25 million from sporting goods giant Nike.

The rejection of Avenatti's appeal means his conviction on three federal charges will remain in place. 

Avenatti gained notoriety for representing adult film star Stormy Daniels in lawsuits against former President Donald Trump but became embroiled in numerous legal scandals. Among them was his scheme to extort millions of dollars from Nike, for which he was found guilty by a jury on three federal counts and sentenced to 30 months in prison.

Avenatti, 53, is currently incarcerated at a federal corrections facility in San Pedro, California. He is scheduled to be released in 2035, according to Bureau of Prison records. Separate from the Nike case, he was also convicted for cheating Daniels and other clients out of millions of dollars. 

Avenatti also represented a woman who accused Justice Brett Kavanaugh of sexual misconduct when he was in high school in the early 1980s, allegations that surfaced during his Supreme Court confirmation process in 2018. Kavanaugh vehemently denied all the claims. He did not participate in the consideration of Avenatti's case.

The criminal case before the Supreme Court stemmed from his representation of sports coach Gary Franklin, whose youth basketball organization Nike sponsored for roughly a decade. The company's sponsorship, though, stopped in 2018. The Justice Department noted that when Avenatti agreed to represent Franklin, he had outstanding judgments of $11 million and his law firm had been kicked out of its office for failure to pay rent.

As part of his work for Franklin, Avenatti set up a meeting with Nike's lawyers in March 2019, and told him he would secure him $1 million in compensation and try to reestablish Nike's relationship with him and his youth basketball organization. 

During the March 2019 meeting, Avenatti made a series of demands to Nike's lawyers and threatened to hold a press conference to expose allegations that the company was illegally paying elite amateur basketball players. Avenatti, who also threatened to leak the story to the New York Times, claimed the public airing of the accusations would harm the company financially.

Nike's representatives contacted federal prosecutors after the meeting and agreed to let the FBI record their conversations with Avenatti. One day later, Avenatti spoke again with a Nike lawyer and reiterated a demand that the company pay Franklin $1.5 million and hire him and another lawyer, Mark Geragos, to conduct an internal investigation into corruption in basketball.

Avenatti said he needed to be paid more than a "few million dollars" for the investigation because "it's worth more in exposure to me to just blow the lid on this thing," according to court papers. He ultimately demanded a payment between $15 million and $25 million, but also suggested that if Nike wanted a confidential settlement agreement, it could be "done" if it paid him $22.5 million for his silence.

"Full confidentiality, we ride off into the sunset," Avenatti was recorded telling Nike attorneys. 

Franklin was not aware that Avenatti planned to threaten Nike to go public with exposing the alleged misconduct and intended for the information to be kept confidential, according to court papers.

A federal grand jury in New York indicted Avenatti on three counts. His efforts to dismiss the charges were unsuccessful, and he was later convicted. Requests for a new trial and judgment of acquittal were denied.

The U.S. Court of Appeals for the 2nd Circuit upheld Avenatti's conviction, finding the evidence was sufficient to find him guilty on all three counts.

He then appealed to the Supreme Court, arguing in part that the federal fraud law he was convicted of violating is unconstitutionally vague. Represented by federal public defenders, Avenatti also argued that a lawyer's settlement demand cannot give rise to federal criminal extortion liability.

"This case vivifies all the ills of honest services fraud," Avenatti's lawyers wrote in a Supreme Court filing. "Federal and state law already contain ample tools to combat abuses of fiduciary duty ― bribery prosecutions, or, as might be relevant here, professional disciplinary proceedings. A formless provision so amenable to prosecutorial abuse does more harm than good."

The Justice Department urged the Supreme Court to turn the case away, calling his claims "meritless." Avenatti's extortion charges were based on his demand that Nike hire him to conduct an internal investigation, not litigation conduct, Solicitor General Elizabeth Prelogar said in a filing to the justices.